McCarthy, Biden’s Debt Ceiling Deal Includes Cuts in IRS Funding By $21 Billion

U.S. President Biden and House Speaker McCarthy finally agreed to suspend the country’s debt ceiling for two years. However, the deal comes with cuts to the Internal Revenue Service funding by $21 billion.

After several months of negotiations, U.S. President Joe Biden and Speaker of the House Kevin McCarthy have finally agreed to suspend the country’s debt ceiling for two years. Back in January, the U.S. reportedly hit its debt ceiling at $31.4 trillion which triggered the fear over a possible default.

According to Louis, Treasury Secretary Janet Yellen had already warned that the U.S. could run out of funds as soon as June 5 if there will be no agreement to raise the country’s debt ceiling. Nonetheless, the deal to suspend the limit until January 2025 still comes with several restrictions and cuts to spending especially with the Internal Revenue Service (IRS).

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Debt Ceiling Deal Cuts IRS Funding

According to Wood, the new debt ceiling deal proposes to eliminate $1.38 billion. However, another $20 billion of the Internal Revenue Service (IRS) funding from the Inflation Reduction Act will be repurposed. Furthermore, $80 billion was set to be distributed over ten years to refurbish the IRS’ infrastructure and replace its aging workforce. $45.6 billion of the said amount was specifically intended for improving enforcement around large businesses and wealthy tax evaders.

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